Assesing the impact of a student loan program on time-to-degree: The case of a program in Peru

Produced by: 
Pontificia Universidad Católica del Perú
Available from: 
April 2014
Paper author(s): 
Luis García (Departamento de Economía de la PUC del Perú)
Topic: 
Education - Health
Year: 
2014

This paper evaluates the impact of a student loan program on time-to-degree for undergraduate students at a large university in Peru. The loans have been provided to low-income students who display satisfactory academic performance. The decision whether to apply for a loan depends on each student; therefore, simple regression analysis may fail to estimate the impact due to the problem of endogenous regresor. In this study, an instrumental variable approach is employed, and it is found that students with loans obtain their degrees more rapidly than similar students without loans.

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